How Rent the Runway Succeeds in the Share Economy


There’s a stereotype you’ve probably heard of: Millennials love to share. And not just what they ate for breakfast (avocado toast), or pictures of their dog (also named Avocado Toast). They share everything from rides (Uber) to homes (Airbnb), to fashion (Rent the Runway). Millennials have changed our purchase economy into a share economy. Companies like Rent the Runway succeed in the share economy by understanding their customers through intelligent data usage.

Rent the Runway is a high-end clothing eCommerce rental company that earns over $100 million a year and has a $1 billion valuation. In 2017, they introduced their now famous program offering unlimited monthly rentals which currently account for the majority of their revenue. Recently, Rent the Runway has announced a partnership with West Elm to rent home furnishings, such as pillows, quilts, and rugs. As Rent the Runway CEO Jenn Hyman states, “The home used to be a private place, but now it’s a very public place. You see that millennials and Gen Z [are] constantly shooting photos of themselves in their homes on Instagram. It’s a reflection of who they are, and they don’t want to be stuck with the same things.”

Rent the Runway is massively successful because they provide high-end products inexpensively to a customer base they deeply understand, and they deliver it in a seamless, easy-to-use process. This is no small task. There are plenty of pitfalls, such as clothes not fitting, slow shipping, and (this being clothes that other people have worn) stains, tears, and odors. As Sam Hollis of jilt.com points out, “Rent the Runway is able to meet their customers’ expectations by owning nearly the entire logistics and fulfillment pipeline. Maintaining these processes in-house gives you more insight into how well you’re able to meet the requirements of your growing customer base.” To combat poor fits, Rent the Runway provides two sizes of clothes with every order, and to keep their quality control to a high standard, they have a system of QA checks that includes the largest dry-cleaning facility in the US.

Every step in the process utilizes customer data. The beginning of the process involves filling out a profile of interests, styles, and sizes, and more information is gathered with every rental. More impressively, 50% of Rent the Runway’s customers regularly provide feedback when prompted to, giving the company a vast array of data points that continue to help with personalization. As Danny Parisi of Glossy.co states, businesses are “starting to understand that more data is not the goal to strive for. Instead, high-quality data — specifically, the kind that is actively given by consumers rather than collected passively — is the new goal.” After all, this is a share economy, and millennials love to share. And there are few companies that take advantage of this better in our new share economy than Rent to Runway.

While some in the retail industry had concerns Rent the Runway may be seen as a competitor for brands, the company has used its customer data to create stronger, more strategic partnerships. In an interview with Computer Weekly, Jennifer Hyman, co-founder, and CEO of Rent the Runway, explains why their data has been helpful for major designers:

"The data the we collect does not cannibalise brand sales. In the past, all a retailer could really tell you was what your sell-through was, but they couldn’t necessarily tell you if the customer actually wore that shirt, how often she wore it, whether it stood the test of time."

Share-oriented brands collect more data and deeper insight into how customers behave after they’ve made a purchase. As a result, many have developed internal tools used to process that data and help understand the story behind it, and as a result, better understand their customers.

At Lineate, we help major brands and B2B companies alike create the tools they need to collect, understand, and use data to be more valuable to their customers and potential partners. To chat more about your data platform goals and needs, reach out to us here to see how we can help.


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